EXHIBIT 10.2


 


LIMITED CONSENT AND AMENDMENT NO. 1 TO CREDIT AGREEMENT


 


This Limited Consent and
Amendment No. 1 to Credit Agreement, dated as of October 3, 2005
(this “Consent and Amendment”), is entered into by and among Vertis, Inc.
(“Vertis”), Vertis Limited (“Vertis Limited”) and Vertis Digital
Services Limited (“Digital Limited” and, collectively with Vertis and
Vertis Limited, the “Borrowers” and each, individually, a “Borrower”),
as Borrowers, the other Credit Parties signatory hereto, General Electric
Capital Corporation, as a Lender and as Agent for Lenders (“Agent”), and
the other Lenders.


 


RECITALS


 


A.            Borrowers, the other Credit Parties,
Agent and Lenders are parties to that certain Credit Agreement, dated as of December 22,
2004 (as now or hereafter amended, restated or otherwise modified, the “Credit
Agreement”).


 


B.            Borrowers and the other Credit Parties
have requested that Agent and Lenders consent to (i) the sale of all of
the issued and outstanding shares of Stock of Vertis Limited pursuant to an
Agreement to be entered into by and between Webcraft, LLC, as seller, and
Overgoal Limited, as buyer (“Buyer”), substantially in the form of Exhibit A
to this Consent and Amendment (the “Stock Purchase Agreement”), and (ii) certain
related actions as further described in Section 2 herein.  Upon consummation of the transactions
contemplated by the Stock Purchase Agreement, Vertis Limited and each of its
Subsidiaries listed on Schedule 1 attached hereto (each, a “Departing
Entity”, and collectively, the “Departing Entities”) shall cease to
be a Credit Party under the Credit Agreement and the other Loan Documents.


 


C.            This Consent and Amendment shall
constitute a Loan Document and these Recitals shall be construed as part of
this Consent and Amendment.


 


NOW THEREFORE, in
consideration of the premises and the mutual covenants hereinafter contained,
and of the Loans and other extensions of credit heretofore, now or hereafter
made to, or for the benefit of, Borrowers by Lenders, Borrowers, the other
Credit Parties, Agent and Lenders hereby agree as follows:


 


1.             Definitions.  Except to the extent otherwise specified
herein, capitalized terms used in this Consent and Amendment shall have the
same meanings ascribed to them in the Credit Agreement and Annex A thereto.


 


2.             Consents.


 


2.1.          Notwithstanding
any provision of the Credit Agreement or any other Loan Document to the
contrary, Agent and Lenders hereby consent to the sale of all of the issued and
outstanding shares of Stock of Vertis Limited to Buyer pursuant to the Stock
Purchase Agreement; provided, that, any changes to the Stock
Purchase Agreement from the version 


 

















 


thereof attached to this Consent and Amendment as Exhibit A
shall be reasonably satisfactory to Agent.


 


2.2.          Notwithstanding
any provision of the Credit Agreement or any other Loan Document to the
contrary, Agent and Lenders hereby consent to the release of Agent’s Liens on
all shares of Stock of each Departing Entity upon the closing of the
transactions contemplated by the Stock Purchase Agreement to the extent such
shares of Stock have been pledged to Agent pursuant to the Credit Agreement or
any other Loan Document.


 


2.3.          Notwithstanding
any provision of the Credit Agreement or any other Loan Document to the
contrary, Agent and Lenders hereby consent to the release of Agent’s Liens on
all properties and assets of each Departing Entity upon the closing of the
transactions contemplated by the Stock Purchase Agreement to the extent such
properties and assets have been pledged to Agent pursuant to the Credit
Agreement or any other Loan Document.


 


2.4.          As
a result of the actions described above in Subsections 2.1, 2.2 and 2.3,
upon the closing of the transactions contemplated by the Stock Purchase
Agreement, Vertis Limited shall cease to be either a Borrower or a Credit Party
under the Credit Agreement and the other Loan Documents.  Notwithstanding any provision of the Credit
Agreement or any other Loan Document to the contrary, Agent and Lenders hereby
consent to such termination at, and only at, such time, of Vertis Limited’s
status as a Borrower and a Credit Party under the Credit Agreement and the
other Loan Documents.


 


2.5.          As
a result of the actions described above in Subsections 2.1, 2.2 and 2.3,
upon the closing of the transactions contemplated by the Stock Purchase
Agreement, each Departing Entity shall cease to be a Credit Party under the
Credit Agreement and the other Loan Documents. 
Notwithstanding any provision of the Credit Agreement or any other Loan
Document to the contrary, Agent and Lenders hereby consent to the such
termination at, and only at, such time, of each Departing Entity’s status as a
Credit Party under the Credit Agreement and the other Loan Documents.


 


2.6.          In
connection with the closing of the transactions contemplated by the Stock
Purchase Agreement, Vertis and the other Credit Parties (other than the
Departing Entities) intend to forgive and forever discharge intercompany loans
and obligations owing by the Departing Entities to Vertis and such other Credit
Parties in an aggregate principal amount of up to £40,000,000 (the “Departing
Entities Intercompany Debt Discharge”) and to assign to the Buyer an
intercompany loan in the principal amount of £7,000,000 owing to Vertis by
Vertis Limited (the “Assigned Vertis Limited Note”).  Notwithstanding any provision of the Credit
Agreement or any other Loan Document to the contrary, Agent and Lenders hereby
consent to the Departing Entities Intercompany Debt Discharge as a part of, and
at the time of the closing of, the transactions contemplated by the Stock
Purchase Agreement and, upon the closing of the transactions contemplated by
the Stock Purchase Agreement, Agent and Lenders hereby consent to the release
of any Liens which Agent may have on any intercompany notes issued by the
Departing Entities to Vertis and the other Credit Parties (other than the
Departing Entities) in respect of the Departing Entities Intercompany Debt
Discharge, to the assignment by Vertis to the Buyer of the Assigned Vertis
Limited Note and to the release of any Liens which Agent may


 


2

















 


have on any intercompany notes issued by Vertis Limited in respect of
the Assigned Vertis Limited Note.


 


3.             Further Assurances.


 


3.1.          Each
Credit Party shall, from time to time, execute and deliver such agreements,
instruments, certificates, reports and other documents and take all such
actions as Agent or Lenders at any time may reasonably request to evidence,
further document, effectuate or otherwise implement the actions described above
in Section 2, under the Credit Agreement and/or the other Loan
Documents.


 


3.2.          At
the time of the closing of the transactions contemplated by the Stock Purchase
Agreement and from time to time thereafter, Agent and Lenders shall execute and
deliver such lien release instruments and documents and take such related
actions as Vertis may reasonably request to evidence, further document,
effectuate or otherwise implement the release of Agent’s Liens as described
above in Section 2, under the Credit Agreement and the other Loan
Documents.


 


4.             Representations
and Warranties.  The Borrowers and
Credit Parties, jointly and severally, hereby represent and warrant to Agent
and Lenders that:


 


4.1.          Aside
from (v) the agreements to provide indemnification/warranties which are
set forth in the Stock Purchase Agreement, under which the maximum aggregate
exposure is £300,000, (w) the agreement set forth in clause 21.2 of the Stock
Purchase Agreement by Webcraft, LLC pursuant to which the Credit Parties (other
than the Departing Entities) have agreed to be responsible for any liabilities
relating to an employee, Mr. Adriaan Roosen, (x) a guaranty provided to
Reader’s Digest in relation to potential employee liabilities regarding the
Swindon workforce, under which the maximum aggregate exposure is £250,000, (y)
a guaranty in favor of Capital One, a customer of the Departing Entities, under
which the aggregate maximum exposure is £2,000,000, and (z) other claims,
obligations, liabilities and exposures in an aggregate amount not to exceed
£5,000,000, (i) there are no post-closing obligations and liabilities,
including, without limitation, contingent obligations and liabilities, under
the Stock Purchase Agreement of Vertis and the other Credit Parties (other than
the Departing Entities) to the Buyer or any other Person, (ii) from and
after the closing of the transactions contemplated by the Stock Purchase
Agreement, Vertis and the other Credit Parties (other than the Departing
Entities) shall not have any obligations, direct or indirect, contingent or
otherwise, for the benefit of any of the Departing Entities and (iii) there
is no existing guaranty, credit support, indemnity or other similar
arrangement, by Vertis or Digital Limited or any other Credit Party, or by any
of their direct or indirect Subsidiaries, aside from the Departing Entities, in
favor of any Departing Entity, the Buyer or any employee, customer or creditor
relating to any Departing Entity or the Buyer.


 


4.2.          The
execution, delivery and performance by the Borrowers and each of the other
Credit Parties of this Consent and Amendment have been duly authorized by all
necessary corporate action, and this Consent and Amendment constitutes the
legal, valid and binding obligation of the Borrowers and each of the other
Credit Parties enforceable against each of them in accordance with its terms,
except as the enforcement hereof may be subject to the effect of any 


 


3

















 


applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditors’ rights generally or to general principles of
equity.


 


4.3.          The
execution, delivery and performance of this Consent and Amendment and the
consummation of the transactions contemplated hereby by Borrowers and each
Credit Party does not, and will not, contravene or conflict with any provision
of (i) law, (ii) any judgment, decree or order, or (iii) the
certificate or articles of incorporation or by-laws or other constituent
documents of any Borrower or any Credit Party, and does not, and will not,
contravene or conflict with, or cause any Lien to arise under, any provision of
any indenture, agreement, mortgage, lease, instrument or other document,
including, without limitation, the February 2003 Senior Subordinated Debt
Documents, the 2002 Senior Debt Documents, the 2003 Senior Secured Debt
Documents or the Mezzanine Debt Documents, binding upon or otherwise affecting
any Borrower or any Credit Party or any property of any Borrower or any Credit
Party.


 


4.4.          No
Default or Event of Default exists under the Credit Agreement or any other Loan
Document or will exist after or be triggered by the execution, delivery and
performance of this Consent and Amendment or the consummation of the
transactions contemplated hereby and by the Stock Purchase Agreement.  In addition, each Borrower and each other
Credit Party hereby represents, warrants and reaffirms that the Credit
Agreement and each of the other Loan Documents remains in full force and
effect.


 


5.             Covenants.  Aside from (v) the agreements to provide
indemnification/warranties which are set forth in the Stock Purchase Agreement,
under which the maximum aggregate exposure is £300,000, (w) the agreement set
forth in clause 21.2 of the Stock Purchase Agreement by Webcraft, LLC pursuant
to which the Credit Parties (other than the Departing Entities) have agreed to
be responsible for any liabilities relating to an employee, Mr. Adriaan
Roosen, (x) a guaranty provided to Reader’s Digest in relation to potential
employee liabilities regarding the Swindon workforce, under which the maximum
aggregate exposure is £250,000, (y) a guaranty in favor of Capital One, a
customer of the Departing Entities, under which the aggregate maximum exposure
is £2,000,000, and (z) other claims, obligations, liabilities and exposures in
an aggregate amount not to exceed £5,000,000, each Borrower and each other
Credit Party executing this Consent and Amendment jointly and severally agrees
as to all Credit Parties that from and after the date hereof, the Credit
Parties shall not and shall not cause or permit their Subsidiaries directly or
indirectly to create, incur, assume or otherwise become or remain directly or
indirectly liable with respect to any guaranty, credit support, indemnity or
other similar arrangement, by Vertis or Digital Limited, or by any of their
direct or indirect Subsidiaries (aside from the Departing Entities) in favor of
any Departing Entity, the Buyer or any employee, customer or creditor relating
to any Departing Entity or the Buyer.


 


6.             Conditions
Precedent to Effectiveness.  The
effectiveness of the consents set forth in Section 2 hereof are in
each instance subject to the satisfaction of each of the following conditions
precedent:


 


6.1.          Consent
and Amendment.  This Consent and
Amendment shall have been duly executed and delivered by the Borrowers, the
Credit Parties, Agent and Lenders.


 


4

















 


6.2.          No
Default.  No Default or Event of
Default shall have occurred and be continuing or would result from the
effectiveness of this Consent and Amendment or the consummation of any of the
transactions contemplated hereby or by the Stock Purchase Agreement.


 


6.3.          Opinion.  Agent and Lenders shall have received an
opinion of counsel to Borrowers, Sullivan & Cromwell LLP, with respect
to this Consent and Amendment, including, without limitation, as to this
Consent and Amendment, the Stock Purchase Agreement and the transactions
contemplated hereby and thereby not conflicting with any provision of the February 2003
Senior Subordinated Debt Documents, the 2002 Senior Debt Documents, the 2003
Senior Secured Debt Documents or the Mezzanine Debt Documents, all in form and
substance acceptable to Agent.


 


6.4.          Miscellaneous.  Agent and Lenders shall have received such
other agreements, instruments and documents as Agent or Lenders may reasonably
request.


 


7.             Reference
to and Effect Upon the Credit Agreement and other Loan Documents.  


 


7.1.          Full
Force and Effect.  Except as
specifically provided herein, the Credit Agreement, the Notes and each other
Loan Document shall remain in full force and effect and each is hereby ratified
and confirmed by all Credit Parties, other than upon consummation of the
transactions contemplated by the Stock Purchase Agreement, the Departing
Entities.


 


7.2.          No
Waiver.  The execution, delivery and
effect of this Consent and Amendment shall be limited precisely as written and
shall not be deemed to (i) be a consent to any waiver of any term or
condition, or to any amendment or modification of any term or condition (except
as specifically provided herein) of the Credit Agreement or any other Loan
Document or (ii) prejudice any right, power or remedy which the Agent or
any Lender now has or may have in the future under or in connection with the
Credit Agreement, the Notes or any other Loan Document.


 


7.3.          Certain
Terms.  Each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or any other
word or words of similar import shall mean and be a reference to the Credit
Agreement as amended hereby, and each reference in any other Loan Document to
the Credit Agreement or any word or words of similar import shall be and mean a
reference to the Credit Agreement as amended hereby.


 


8.             Counterparts.  This Consent and Amendment may be executed in
any number of counterparts, each of which when so executed shall be deemed an
original but all such counterparts shall constitute one and the same
instrument.  Delivery of an executed
counterpart of a signature page to this Consent and Amendment by
telecopier shall be as effective as delivery of a manually executed counterpart
signature page to this Consent and Amendment.


 


9.             Costs
and Expenses.  As provided in the
Credit Agreement, Borrowers shall pay the fees, costs and expenses incurred by
Agent in connection with the preparation, execution and delivery of this
Consent and Amendment (including, without limitation, attorneys’ fees).


 


5

















 


10.           GOVERNING
LAW.  THIS CONSENT AND AMENDMENT
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPALS.


 


11.           Headings.  Section headings in this Consent and
Amendment are included herein for convenience of reference only and shall not
constitute a part of this Consent and Amendment for any other purpose.


 


[Signature Pages Follow]


 


6

















 


IN WITNESS WHEREOF, this
Consent and Amendment has been duly executed as of the date first written
above.


 


	
   

  	
  BORROWERS:

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Stephen E.
  Tremblay

  	
   

  
	
   

  	
  Name:

  	
  Stephen E. Tremblay

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS
  LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS
  DIGITAL SERVICES LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
								



 

















 


	
   

  	
  GENERAL
  ELECTRIC CAPITAL 

  CORPORATION

  
	
   

  	
  as Agent, an L/C
  Issuer and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Daniel D.
  McCready

  	
   

  
	
   

  	
   

  	
  Duly Authorized Signatory

  
					



 

















 


	
   

  	
  BANK
  OF AMERICA, N.A.

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Richard
  Levenson

  	
   

  
	
   

  	
  Name:

  	
  Richard Levenson

  
	
   

  	
  Title:

  	
  Senior Vice President

  
						



 

















 


The following Persons are
signatory to this Amendment in their capacity as Credit Parties and not as
Borrowers:


 


	
   

  	
  VERTIS
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Stephen E.
  Tremblay

  	
   

  
	
   

  	
  Name:

  	
  Stephen E. Tremblay

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ENTERON
  GROUP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Stephen E.
  Tremblay

  	
   

  
	
   

  	
  Name:

  	
  Stephen E. Tremblay

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WEBCRAFT,
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Stephen E.
  Tremblay

  	
   

  
	
   

  	
  Name:

  	
  Stephen E. Tremblay

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PRINTCO,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Stephen E.
  Tremblay

  	
   

  
	
   

  	
  Name:

  	
  Stephen E. Tremblay

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WEBCRAFT
  CHEMICALS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Stephen E.
  Tremblay

  	
   

  
	
   

  	
  Name:

  	
  Stephen E. Tremblay

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
								



 

















 


	
   

  	
  VERTIS
  PRS LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  ADMAGIC GROUP LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS
  DIRECT MARKETING SERVICES (CROYDON) LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS
  DIRECT MARKETING SERVICES (LEICESTER) LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS
  FULFILMENT SERVICES LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADMAGIC
  LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
					



 

















 


	
   

  	
  VERTIS
  DIRECT RESPONSE LTD

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FUSION
  PREMEDIA GROUP LTD

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS
  HARVEY HUNTER LTD

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
						



 

















 


EXHIBIT A


to


CONSENT AND AMENDMENT


 


 


Stock Purchase Agreement


 

















 


SCHEDULE 1


to


CONSENT AND AMENDMENT


 


 


Departing Entities


 


Vertis Limited


Vertis Direct Marketing
Services (Croydon) Limited


Vertis Direct Marketing
Services (Leicester) Limited


Vertis Fulfilment
Services Limited


Vertis Direct Response
Ltd


Vertis Harvey Hunter Ltd